After years of record highs, the trade gap has taken a dive. It's a bit of good news on the surface, but it happened for a bad reason: A severe recession has sharply cut U.S. demand for foreign-made goods.

The deficit for November plunged by 28.7 percent to $40.4 billion, the Commerce Department reported Tuesday. That was the lowest monthly trade gap in five years and a far bigger improvement than economists had been expecting.

Here are some questions and answers about how the drop in the trade deficit relates to the overall economy.

Q: What caused the big drop in November's deficit?

A: The trade deficit – the difference between what America buys from foreign countries and what it sells to foreign countries – improved dramatically in November because imports dropped more sharply than exports. Imports were down 12 percent, double the 5.9 percent drop in exports.

Q: What caused the big drop in imports?

A: The major reason was a huge fall in oil imports, reflecting a record drop in the average price of a barrel of imported crude oil. But imports of many other items were down as well, from foreign-made cars to clothing and toys and games.

The drop in consumer goods was so big that it resulted in a record decline in imports from China, the country with which we run the largest trade deficit.

Q: Why are Americans buying so much less stuff from overseas?

A: The major reason is the weak U.S. economy, which entered a recession in December 2007. The downturn is now the longest in a quarter century. Many analysts believe it will not end until this summer, which would make it the longest recession in the post-World War II period.

The slide has resulted in more than 1 million jobs lost in just the last two months, with a total of 2.6 million lost over the past year – the most since World War II. With unemployment rising and housing prices and the stock market plunging, consumers have become extremely fearful about spending money.

Consumer spending accounts for two-thirds of total economic activity and the weakness in this area means less demand for goods, including those imported from abroad.

Q: Does the big drop in the trade deficit also mean U.S. companies are doing a better job of selling their products overseas?

A: Unfortunately, that was not the case.

U.S. exports were down for a fourth straight month, falling to the lowest level in 14 months. And economists are predicting further declines in exports as the recession that began in the United States spreads to many of America's major trading partners. Many countries in Europe and Asia are also struggling at the moment.

The trade deficit shrank despite the drop in exports – because imports fell even more sharply.

Q: Still, shouldn't a big drop in the trade deficit give the economy a needed boost?

A: Analysts are pessimistic on that score given the weakness in exports. Exports had been one of the few bright spots for the economy over the past few years, but now that is disappearing.

While imports are dropping as well, in the current economic downturn that just means lost sales for foreign manufacturers at the same time that U.S. companies are seeing demand decline. In other words, the smaller trade gap doesn't mean U.S. companies are doing a better job competing – it just means that both American and foreign companies are struggling.

Q: So what will it take to get the U.S. economy out of recession?

A: Economists believe that will only occur once overall demand picks up for both domestic products and foreign goods. They are hopeful that will start to happen in the second half of this year.

Q: Once the economy starts to improve will the trade deficit keep shrinking?

A: Unfortunately, that is not what economists are forecasting.

Nigel Gault, an economist for IHS Global Insight, predicted that the deficit for goods and services will drop to $282 billion this year, quite an improvement from the $688 billion imbalance many analysts believe will be the final total for 2008. However, Gault forecast that the deficit for 2010 will begin climbing again, rising to a projected $461 billion, reflecting a rebounding U.S. economy that will boost consumers' appetite for goods, including those made overseas.

Q: So a recession is good for the trade deficit, but bad for the overall economy?

A: Economists like to say that the best way to cure America's trade troubles is to promote strong global growth.